← Nonprofit Leadership Podcast
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- [00:03]
A
When we acknowledge a gift and we say, you know, Rob, thank you for that gift of $25 on December 12, what we're actually acknowledging in that sentence is the least important part of what you did. Because what we're not capturing is all of the identity, all of the emotional activity that it took for you to press the button. And you went through a lot of thought process, a lot of engagement on your part that ultimately culminated in you pushing that button.
- [00:36]
B
This is Dr. Rob Harder with the nonprofit Leadership podcast, Making your world better. What does it take to be an effective nonprofit leader today? What are the biggest challenges? What are the biggest obstacles? How should nonprofits fundraise in an economy that is constantly changing? All of these reasons combined led me to start this show. And it's my hope that through this series, people can learn not only what it takes to be an effective nonprofit organization, but to hear from effective leaders who are successfully making a positive impact in their communities. We hope you enjoy the show as together we hear how they are making their world better.
- [01:11]
A
Welcome to the nonprofit leadership Podcast with Rob Harder. I'm Lena Larew, based currently in Mexico, and I'm a listener just like you who who cares about the nonprofit world and the people leading it. If you're looking to learn and grow as a nonprofit leader, you're in the right place. Thanks for listening. Now here's Rob.
- [01:36]
B
This podcast is sponsored by DonorBox. DonorBox, helping you help others with the best donation forms in the business. This is Rob Harder. We're so glad you're here. Thanks for tuning in today. And we've got Cherian Koshy here with us today. And Cherian, we always do this for all of our guests. We ask that just to share a bit about their story. What got you up to this point. So I'd love to start with you on that. Just tell us a bit of your story today and where and how you got to where you are today.
- [02:01]
A
Thanks so much for having me and it's great to be here. I really appreciate the just opportunity to do the origin story conversation. So this next year will actually be my 30th year in the nonprofit sector. Most of those years have been spent in fundraising in some way, shape or form. And so I started back in 1997, knocking on doors, asking people for money for the Sierra Club and my human rights campaign, the mean streets of Minneapolis. And nothing teaches you more about like, rejection than standing in front of someone's door and doing that script and saying like, and getting door slammed in your face for One reason or another. So I learned a lot of lessons really quickly. And then my pathway led me out east where I worked for a number of organizations, became the executive director of a couple of nonprofits out there, and then headed out west for a couple of roles and ended up back in the Midwest. And that's where I've been for the last 17 years or so. And so my career has spanned a lot of different subsectors. I've worked in education and health care, in the arts and faith based organizations or national nonprofits that are really big. But throughout all of those different things, what I have come back to is the question of why do people give? And so whether it's been in the nonprofit space or now in a technology role, my questions keep coming back to why do people give? What's driving people to give? I've always kind of wanted to understand that that's sort of the kind of underlying piece. And we talk a lot about campaigns and pipelines and moves, management, and I never really felt comfortable just sort of taking things at a surface level. So that's led me down the path of going to conferences and getting certifications inside of the philanthropy space, inside of, you know, fundraising and whatnot, but also outside of that space. So that's kind of the brief history of where I've been and kind of what got me to where I am now, which is so I was working in a nonprofit. I built an AI tool. That tool got acquired by a company that was then called I Wave and it's now hindsight. So now I work for them and have the real pleasure of being able to, to run around the country and the world and talk about whether it's neuroscience, behavioral science or AI or some of the other fundraising topics. It's just a joy to be able to meet people and share what, what I'm learning about and learn alongside a sector that I really care about.
- [04:36]
B
Well, it's. Your story is very fascinating and I love this topic we're going to dive into today and you set it up well in terms of what you're doing now and you're working with AI and this product that you put together. We're talking all about neuro giving today. So for my listeners, we're going to talk about how your brain reacts to the whole concept, if you will, of giving, philanthropy, charitable giving specifically. And so it's really a fascinating conversation. And again, you of course wrote the book called Neural Giving. And so thank you for giving, kind of the setup for that. It's nice to hear now, just your background, and you've done it yourself, like you've led nonprofit, you've been really involved in different ways. So let's dive in now to this topic because it's a big one and I think it's very much cutting edge in terms of where I think a lot of nonprofits who are really looking to figure out better, how do we get better at philanthropy, knowing what we know now about the brain. And your book really gives a lot of insights to that. So let's talk about that a little bit. This book, as we mentioned, we're going to have in the show notes, it's called Neuro Giving. We encourage you to check it out. So talk about a little bit, just the first things. What prompted you to write this book? You mentioned a little bit, you know, this AI company sounds like it bought your product. But talk about what prompted you initially, it sounded like you were really trying to figure out why do people give, what motivates them to give, and then pairing that with science. So maybe give a little bit more background on what prompted first for you to write this book in the first place.
- [05:56]
A
Yeah. So one of the reasons why I thought I would be good at fundraising back in the day. So I had a career before fundraising in public speaking. I was a high school debate and speech person, and then I coached high school debate and speech. I had the pleasure of coaching the US Quote, unquote, Olympic team. And we were so my, my students were really competitive when I was coaching. And I thought that because I knew how to form an argument, whether it was on paper or in oral argument, I could stand in front of someone and be able to come up with the right reasons for why someone would give. And whether that was standing on someone's doorstep or writing a grant. I figured that if I could come up with the strongest argument, I could convince someone to make a gift to the organization. And so at one point, one of my jobs was to be the first of all the grant writer, but then eventually the director of development for the National Speech and Debate Association. So I knew I was a subject matter expert, but I also had these skills. And I was like, oh, this will make sense. At the same time, I was sort of learning how to be a fundraiser. And I went to all of these conferences and we didn't really have webinars back then, but I, you know, I went read the books and whatnot. I listened to other people and I tried to implement what they said. Sometimes it would work, other times it wouldn't work. And I Didn't really understand why, if I knew how to make an argument and I was doing what they said, why it would work sometimes and not work other times. And I sort of internalize this as user error, like, I need to get better and making a better argument. My hope is that people now have a researched, informed way of jumpstarting that process and then debate that inside of their organization without having to turn donors into targets or treating neuroscience into this, like, bag of tricks. Because the goal isn't about manipulation. The goal is about really developing meaning. So that's really what prompted me to write the book, and that's really what I hope to relay in having these types of conversations. So really appreciate that question and how that, you know, might help people think about the book and the work.
- [08:14]
B
Yeah, no, I'm glad you did, because it makes sense. I see that I track with you in terms of what you're trying to do to figure out what motivates people to do different things. And certainly if you've done it yourself, where you've asked for things in a charity context or a nonprofit context, and some people respond well and other people don't, and you automatically think user error. And I think that's the story for so many nonprofit leaders, development directors, they have that same experience, and they beat themselves up and say, what can I do better? What should I have done better? All those things. And so you're like, well, there's maybe that could be it, but there's also another piece we need to start looking at. It's how the brain responds. In fact, then that's one of the things you talk about in your book, is that generosity is really literally wired into the brain. And for example, you point out in the book that giving activates the same reward centers as personal pleasure. So let's talk about that. For nonprofit leaders that are listening to this and want to understand how our brain works, give us the insight of how to design donor experiences that really feel joyful rather than transactional. What did your research find?
- [09:15]
A
Yeah, so, I mean, this is a complex question that know dives deep into, you know, for every organization is going to be slightly different. So for the purposes of the. The podcast, what I would say is the shift is to start stop treating the gift as the end of the experience and to think about the gift as often the beginning of the donor's emotional reward. So what I'm fond of saying is that often, you know, our databases are really good at tracking dates and dollars because that's what they're accustomed to doing, but they're not great at understanding why the donor gave. And when we acknowledge a gift and we say, you know, Rob, thank you for that gift of $25 on December 12, what we're actually acknowledging in that sentence is the least important part of what you did. Because what we're not capturing is all of the identity, all of the emotional activity that it took for you to press the button. And you went through a lot of thought process, a lot of engagement on your part that ultimately culminated in you pushing that button. Maybe it had to do, like, whatever story you told yourself in the moments preceding. Pushing the button is really what matters. When someone gives, they're not just transferring money. They're not pushing the buy now button on Amazon. They're expressing something deeply meaningful about themselves. And, and they're saying, this matters to me. They're mixing their money with their identity, with their passion, with their belonging, and they want to be seen in that way. They're. They. They're saying, this is the kind of person I want to be. This is who I want to be when I grow up. So when nonprofits are designing donor experiences, the key is to say, really design that experience to help people feel that moment, that meaning, and, and not think of it as, like an administrative task. It's. It has to be part of that mission experience and reinforce that. So the reporting can't be just proof that we spent the money. Right. Like, it's not just that. Right. Like, yes, that's helpful. Yes, we did what we said we were going to do. It has to help the donor see themselves as the person they thought they were going to be when they did that. And they. That stewardship can't just be a receipt with better formatting. It has to be reinforcing the identity and like I said, that belonging. So I don't want to be super prescriptive and say, like, do this and do that. Like, my coach, Rory, has tried not to be a should ad when you do this. And I got to be really clear, clear about enunciating when I do that. But for everybody listening, I want you to really think about, like, in your organization, what is the feeling, like, the moment after someone gives and do they feel closer to the mission, or do they just feel like they were processed?
- [12:25]
B
Yeah, that's a great. Oh, that's a really good point. I mean, that kind of adds to one of the. Another thing you say in your book, you talk about we don't think our way to giving. We think feel our way there and so for leaders to try to train their team, their development director, their CEO, how does understanding the emotional brain change the way they should approach donor communications in the process?
- [12:47]
A
I mean, fundamentally, at least for me, that changed literally everything. Like, honestly, it changed everything for me. Now, the research actually indicates, and the research that I link onto is the Dimasio research that his research indicates that his research fund, and not everyone, but a lot of people agree with this. He found that when people had the emotional center of their brain damaged, they were actually unable to make decisions at all. So the only part of their brain that they could access is the logical part of their brain, and they couldn't make decisions at all. Now, what that means is, in terms of context for us, is that we've always sort of assumed that if we give people enough information, if we build awareness of our cause, that they'll make the right philanthropic decision. Like
- [13:43]
B
research says.
- [13:43]
A
No.
- [13:44]
B
Yeah.
- [13:44]
A
It's like, completely false. And whether you take Damasio's research to its, like, to its complete juxtaposition end, you know, fine, but every neuroscientist is going to agree that the brain doesn't work that way. Like, at. At some level, the. Whether it's all the way over here and you can't make any decision. Fine, fine, fine. But like, the emotional brain is the biggest driver. The logical brain is the weakest driver. Every neuroscientist is going to agree. So information alone does not move people. And what I want to be clear about is that emotion's not the opposite of reason. Emotion is what tells the brain, this is the thing that is you, that you pay attention to. This is what matters. And so what in terms of, like, lexical priority or ordering of priority, your emotional brain says, this is the thing that you start with. And then your logical brain starts to justify the thing that your emotional brain cares about. It goes looking for receipts. And so the donor doesn't actually need to first know your budget gap. It doesn't actually need to know the ticky, tacky stuff. They. They need to know why this moment matters, who's affected, what is, what's possible. What, like, why this, why this matters in a general sense. And I want to be, again, careful. Like, we don't abandon facts in a greater sense. It just means that facts need to be emotionally compelling, right? Emotionally organized, and even data needs to be emotionally captured. And this is why, like, storytelling is really important. You know, we could go off on a whole rabbit trail on storytelling, but. But the best appeals are putting together those components and so the piece that I keep coming back to with, with most folks is if your approach looks at the heart for opening the door and then the head locks in the permission to walk through that conversation.
- [15:54]
B
That's so good. And, you know, it's interesting. You already read my mind a bit in that I was thinking about storytelling that is so critical. And I do think a lot of people that have, have done development work for a long time, they understand stories are really what grab people's hearts and. And again, that's another way to say it hits their emotional brain and really moves them and motivates them. We'll be right back. Are you looking for an easy and effective way to boost your nonprofit's donations? Well, look no further than DonorBox, the online fundraising platform that streamlines your fundraising efforts, maximizes donations, and simplifies giving for your supporters. With DonorBox, you can create beautiful donation forms, accept digital wallet payments, track donations, and send auto receipts. And the best part, there are no setup or monthly fees and no long term contracts required. So what are you waiting for? Visit donorbox.org today to get started. That is www.donorbox.org. You mentioned. I thought it was really interesting. One of your central themes is all about removing friction. I thought that was interesting. That reducing cognitive overload and confusion so donors can act on their generous impulses. I have seen that a lot where you just put too much information and it does create cognitive overload. And I think that's a really interesting insight. So talk more about that. Tell me about what you see are some of the most common friction points that most nonprofit leaders and development directors use or in campaigns. And then how can people fix them?
- [17:29]
A
So it's a big one. Yeah, it is a big one. And I mean, we could do a whole podcast episode on friction and the nuances around that. I would say the biggest friction point is confusion. We often ask donors to care about too much. We give them too many options, too much insider language. It's the curse of knowledge. We're too close to the organization, to the nuance, so we use insider language. Edgar calls this terministic language terministic screen. So we know like acronyms. We know, like, we do this in, in nonprofits all the time, like a CFRE or a CRT or whatever. Like, yeah, whatever. So like. And we have too many priorities, which is ironic because the word priorities is a like doesn't make sense. The. The word priorities was invented to justify that. We can't prioritize. Priority means the thing that comes prior. You can't have multiple priorities that you didn't pay for that. And anyway, this little extra bonus. Yeah, exactly. And then we wonder why people don't respond. But it's because we've given them too many things to think about. And the donor doesn't have to give, right? They don't need there, there's no need to give to a nonprofit like they don't need. They do need. Well, we could debate whether they need a phone, right? Like that's a whole different thing. But they feel like they need a phone or they need a mop to clean up the mess in the, in the kitchen. They go to Amazon because something is needed to solve a problem. But a nonprofit is a gift to a nonprofit is not something they have to do. So when you talk about cognitive overload, that's the one that immediately comes to mind and is sort of, I guess, the most obvious. Like on a donor donation form, the donor has to think too hard or they have to fill out too much. They have to understand the form itself and what's being asked of them. But then there are so many things that they have to fill out, right? The amount, the address, the. Their dog's favorite color, you know, all of these things. And we're making it so hard and we forget that if they land on that page, it's really the same thing as the donor holding a bag of money saying, here, I want to give this to you. Just take it, just take the money. So in that moment, take the money, ask the questions later, right? Figure out all the things later. What is the fewest number of questions that we have to ask in this moment to just take the money, solve that other problem later? I mean, I guess the other thing to note is that when we're talking to a donor, like just even face to face, we often do this thing where we're saying like, you can help in so many ways because we don't want to pigeonhole the donor into like one thing and then for them to say no to that one thing. So like, I'll do this exercise with organizations all the time and to say like, if, if I could give you a million dollars, what would you do with it? And the donors organization will often say, well, we would do lots of things. Nobody buys into lots of things. I don't know what lots of things is. That doesn't inspire me. Right? But if you say like we can do this, then I can understand cognitively understand, like that makes sense. I will buy into that. I will, like, I can fund that so that's friction in the brain to, like, what is. Like, what do all these things mean? And then now I have a bunch of questions. And it's our worry that, that if the donor doesn't like one part of one thing, then we want to give them something else on the, like, the philanthropic buffet that they can find and they like. But it's actually the wrong approach. Now, the last thing I'll say about friction before we move on is that there's bad friction, which we're all familiar with, but there's also good friction. And what I mean by that is that it actually might make sense to slow down the process for donors to have them think about, why am I doing this? And what I mean by that is to say, well, when you ask a donor a question like, what's most important about this for you? You're actually asking an identity encoding question that reinforces why they're doing what they're doing. So think about those types of good friction elements as a reinforcement. So you're slowing something down, but you're slowing something down for a good reason. That reinforces their identity and therefore increases the chance of their loyalty, of their renewal of them, kind of embedding why something is important to them if they're rehearsing to themselves why this is important. That's actually good friction. I love that.
- [22:27]
B
That's so fascinating. Well, as I'm listening to this and I'm thinking, my listeners who are listening to this podcast episod quickly started thinking about, well, tell me about more, the ethics of utilizing some of this information so it doesn't turn into manipulation. And your book actually talks about that. You speak quite a bit about the ethical side of using neuroscience in fundraising. So when we talk about the human touch and making sure we maintain the human touch, treating donors as people, as partners, not as data points. How can leaders balance that innovation and all the things you've been learning and you put in your book with integrity, but particularly now, as we get AI and we have all these other technology tools that really can turn into or what feels like manipulation and treating people, again, as data points. Could you speak to that a little bit?
- [23:10]
A
Oh, yeah, absolutely. So this, I mean, I would say this is the most important issue facing the sector, bar none. In fact, I got pushback from the editor because I put ethical, you know, ethical issues and sometimes repetitive ethical issues across the book because I thought there would be times where someone would pick up on one chapter and might not read it all the way through. And I didn't want to just tack on ethics at the end. So what I want to remind people is that there's. There's nothing wrong with AI per se or innovation per se. They can absolutely help to help nonprofits work smarter in some ways. I'm not an AI, not a Luddite by any means. I do use AI. I built and sold an AI company. But there are places and spaces where AI is appropriate and. And there are places and spaces where AI is inappropriate. So AI can summarize information, it can help identify patterns, it can personalize communications, it can reduce some administrative burden and free up more time for human relationships. But the ethical question is not can we do this thing? It's should we do this and under what conditions? So I think that leaders need to create frameworks around where should there be automation, where should AI be involved, where should IT assist? And, you know, where do we have human approval for those things? And where should human judgment lead? Where is the appropriate place for really only human contact? And I think that that distinction is really relevant because fundraising generosity is built upon trust, and that is the bedrock principle that's essential. Donors are ultimately people with stories and values and fears and hopes and agency. And what AI is not able to do is understand the nuance, the pause, the unspoken component. AI can process data, but it can't understand the thing that's not said. And that's where I think there's inherent limitation. And so I think the future belongs to organizations that understand that nuance, that there's. There's both innovation and transparency, particularly when it comes to AI. But my friend Nathan Chappelle and I have done now the only longitudinal study on donor perceptions of AI. And what donors have said to us is that trust and transparency are the most important things to them and that they care about the human touch and fundraising. So that really reinforces, in terms of what we've seen now over a couple of years, that. That donors prefer the sort of backend functions, AI being used for backend functions. But the other thing that I would add is the interesting neuroscience component here is that when. When people process trust, there's sort of this prediction mechanism that happens where the brain says, did my prediction, like, meet the baseline? And they're like, okay, if it consistently meets the baseline, I. I'm sort of on autopilot. That's great. And if you're a mediocre organization and you just sort of like, just do the standard thing your donors are, that may not be great. But if you're just doing the baseline they're fine. If you do above the baseline, like a surprise and delight, then your donors are like, ooh, this is great, I'm going to trust this organization more. But if you fall below the baseline, then what ends up happening is that the, the person then shuts down, the trust is violated. That makes sense, right? Here's the problem. If you do the good thing, if you exceed the baseline in first and then you afterwards drop, you create a worse circumstance for the donor than if you were just weirdly mediocre. You created a high expectation and then a lower expectation. So here's where I want you to think about this in terms of AI for all of the listeners out there. AI is oddly perfect in what it does. It is oddly better than humans in the things that it does. So are we setting a better than average expectation, higher than the baseline expectation for writing or engagement or speed or consistency or memory, whatever those things are? We boost the donor's expectation well above the baseline and then are they disappointed when they get a human response and now they actually don't like the human, they don't like the part that they should like and they distrust the human or the organization more? That's my worry. And I think that's, that doesn't get talked about or thought about and is really disconcerting. So I would say we really need to think long term about our use, the ways in which we're using AI and how we're, we're thinking about quote, unquote, innovation. Is it really innovation or is it just because this looks shiny?
- [28:18]
B
Yeah. Oh, I think you're getting into something so important. I've had so many conversations on this show about fundraising, specifically about what you've mentioned that we cannot treat donors as transactions or data points. But it's much more of a relationship. And as you talked about the long term mentality, really looking at a long term relationship with a donor as a person, as a friend of the organization. When you think about neuro giving, and you even described this, neuro giving is not about just getting gifts. It's about creating that lifelong loyalty. It's building that relationship with donors who that really just fall in love with the organization, right. And really care about the mission of what you're about to. So again, for nonprofit executives that are listening today or development directors that are listening or trying to learn, what can I learn about neuro giving that I can really enhance my, you know, giving ability or my development ability, what leadership behaviors that can create more of a culture of trust, number one, more Transparency, as you mentioned, so they can really truly focus on the things that most are most important to donors and that is that relationship building. So with all this information about neuro giving, what would you say again, how do you still maintain that human touch and make sure you are focused on the long term relationship?
- [29:25]
A
For leaders in particular, the most important thing to remember is that relationships are built upon consistency. You, you don't have a best friend who has become a best friend overnight. They become a best friend because you show up regularly over years. And so the donor does not become a trusted partner of the institution because of one campaign or one lovely thank you note or one dinner. It's built through repeated experiences. And that's the element of trust being biological. That's the research by Paul Zach. So leaders need to set the tone for the organization to know that if there's an expectation that we're going to compress this timeline and somehow trust is going to be built in a month or something like that, that's where the organization will treat fundraising as extraction. But if the leadership talks about donors as partners in the mission, that changes the culture. I think that this, the second piece is thinking about it in terms of leadership thinking about it, about curiosity. So leaders encourage their team to ask better questions. Why do people stay with us? Why do they leave? What do donors remember about us? And are we making it hard for people to belong? So belonging is built upon kind of closing the loop. And if leaders again set the tone for those types of questions, not just how many dollars are we bringing in, we then create that culture that drives better outcomes. And then lastly, I would say that leaders need to model patience. So lifelong loyalty is not built through constant urgency of, you know, we need this now, we need the roof is on fire type of things. Urgency may get a gift and in fact that's why it's a neuroscience principle or behavioral science principle. But meaning is what keeps a donor over time. So organizations that I would say win long term. And if you look at these leaders that have done a great job over a long period of time in the for profit sector and the nonprofit sector are the ones that remember that their stakeholders and why their stakeholders cared in the first place, why these, the people around them, whether they're employees or customers or donors, are engaged with this project for a long period of time. And that's really the key.
- [31:57]
B
Now it's been a fascinating conversation. Again, this is one of those conversations that could go another hour or two. There's so much here, right? But the good news My hope is we wet the appetite of those who are listening. They're going to find out a little bit more about your book. There's going to be several show notes with different links that you can just click on and find out more information. Because this is there's so much coming out now about this whole concept. I think you were a little bit on the cutting edge in terms of getting this book out. One of the first to get it out there. But it is so fascinating to learn and understand how our brain responds to, you know, the asks that we give on a regular basis through our nonprofit organization. So thank you for writing the book. Thanks for the conversation. And I think Nathan Chappelle, I know, has been out there doing all kinds of speaking engagements talking about this very same thing. So I'm glad we're talking about it. And I love that you brought it back to some of the ethical guidelines. And it really, at the end of the day, it is about relationships. I think that is so important. So for those who are listening, want to get to know a little bit more about your book and maybe get to know more about you, what's the best way they can connect with the book and with you?
- [32:54]
A
So I post a lot on LinkedIn. I have a website@turing koshy.com and the book website is neurogiving.com there's some bonuses there. If you buy the book, you can get some of those bonuses. So those are the best ways to connect with me. But I want to thank you for having me on the show. And I just want to remind folks that, you know, while I wrote the book, it stands on top of a lot of other people who have done this research inside of the sector and outside of the sector. Dr. Russell James was there on MRI studies, you know, decades ago. Jen Chang was is the preeminent donor behavior psychologist. Like, there's lots of people that you should follow and take. My goal for everyone who's hearing this is not necessarily to follow me, but to understand. Like, go take this research and make it your own. Apply this in your own organization. See where this takes you. And I hope that you build on it, that you develop it, and that you find new ways that it applies not only your own organization, but elsewhere. Now.
- [33:49]
B
Well said and thank you. And we'll just thanks for taking time to share a little bit more about your findings. Again, I encourage my listeners to go check it out. There is so much good information out there about this and it will, I think, help you focus on the main things the most important things when it comes to your development and growing as a skill. It is a skill that you can develop over time and having this toolkit of neuro giving as a book can just fill out that information for you. So again Cherian, thanks so much for being on the show and taking time to share your insights.
- [34:16]
A
My pleasure. Thanks again.
- [34:18]
B
All right, well thanks everybody for tuning in. We will see you next week. Hey friends. Well I wanted you to know that this podcast can be found on itunes, Spotify, Amazon, Google Podcasts and wherever you listen to other podcasts. I also want to encourage you to like subscribe and share this podcast with others. This will actually help us get this great content out to more nonprofit leaders just like you. You can also join the nonprofit leadership Podcast community, find other resources and interviews of past guests, all on my website. Nonprofit Leadership Podcast well, thanks again for listening and until next time, keep making your world better. This podcast is sponsored by DonorBox, DonorBox, helping you help others with the best donation forms in the business.